Personal Finance

All you need to know about mutual funds last week

Updated : December 15, 2019 01:39 PM IST

SIP or systematic investment plan inflows stood at Rs 8,272 crore in November, an increase of Rs 26 crore from October.

Gold has had a very impressive 2019, rising close to around 25 percent year-to-date.

Edelweiss Mutual Fund has launched the new fund offer of Bharat Bond ETF, India's first corporate bond exchange-traded fund.

SIP or systematic investment plan inflows stood at Rs 8,272 crore in November, an increase of Rs 26 crore from October. Association of Mutual Funds in India (AMFI) data shows that total SIP inflows so far in 2019 strands at Rs 65,880 crore. The asset under management (AUM) of the mutual fund industry reached Rs 27 lakh crore in November 2019, a 15 percent growth in AUM (YoY) from Rs 23.59 lakh crore in the same month last year.

Net inflows into equity mutual funds, including close-ended schemes, stands at Rs 933 crore against Rs 6,015 crore in the previous month, the latest data AMFI shows.

In comparison, The assets under management of equity-oriented schemes stood at Rs 789,219 crores in November, up from Rs 7,57,687 crore in October.

AMFI data also shows that retail investors are not churning their portfolios as much as high-net-worth individuals (HNIs). Retail investors held around 47 percent of equity assets for more than two years compared to around 31 percent of equity assets for HNIs. Percentage of equity AUM held over two years by retail investors has also increased marginally to 46.65 percent above the June 2019 figure of 45.51 percent. Research has shown that return chasing and high churn can lead to a return underperformance of up to 1.5 percent a year.

Gold has had a very impressive 2019, rising close to around 25 percent year-to-date. The latest data from Bloomberg Intelligence shows that central banks have been buying nearly 20 percent of the world's gold supply, approaching the highest levels since the Richard Nixon era. Central banks were net sellers of gold from 1971 through to 2010. Gold is an effective portfolio diversifier with low correlation to equity returns especially during wars, market crashes, and disasters. If you haven't already, we recommend that you add some gold exposure to your portfolio.

Edelweiss Mutual Fund has launched the new fund offer of Bharat Bond ETF, India's first corporate bond exchange-traded fund. This fund is an initiative of the government of India's Department of Investment and Public Asset Management (DIPAM). The new fund offer (NFO) for Bharat Bond Fof April 2023 and Bharat Bond Fof April 2030, fund of funds investing primarily in Bharat Bond ETF, will remain open for subscription until December 20, 2019.

Movers and shakers

1. Essel Mutual Fund announced that Manav Vijay has ceased to be the Fund Manager and Key Personnel of the AMC, with effect from December 7, 2019. Saravana Kumar will take over the fund manager responsibilities.

2. Principal Mutual Fund announced that Pedro Borda has vacated the office of director of Principal Asset Management Private Limited with effect from December 5, 2019.

Quote of the week

Barack Obama: This is the moment when we must build on the wealth that open markets have created, and share its benefits more equitably. Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few, and not the many.

Gaurav Rastogi is the CEO of Kuvera.in: India’s first completely free direct mutual fund investing platform.

Read his columns here.